Two- and three-component polymer blends are well known in the art. Examples include U.S. Pat. Nos. 3,769,260; 3,578,729; 3,639,527; 3,435,093; and 4,081,422. The present invention differs from the compositions disclosed in these patents in that the third component is a poly(tetramethylene terephthalate)-co-2-butene-1,4-diol-g-polyethylene. It is believed that the unobviously high-impact strength and good dispersion of polyethylene in the polyester results from the ability of the graft copolymer to compatibilize the polyethylene with the polyester.